According to the Individual Income Tax Law of People's Republic of China (PRC), a taxpayer who has a domicile or no domicile in China and lives in China for 1 year belongs to a resident taxpayer in China, and should pay individual income tax on his income originating in China and abroad, with unlimited tax obligations.
Where a taxpayer has no domicile in China or has domicile but has resided in China for less than 1 year, China, non-resident taxpayer shall pay individual income tax on its income originating in China and bear limited tax liability.
First of all, the standards of resident taxpayers and non-resident taxpayer.
Taxpayers of individual income tax can generally refer to natural persons who obtain income, including resident taxpayers and non-resident taxpayer.
In real life, the situation of natural persons is more complicated. Whether a natural person has a residence in a country. Life span varies. According to what standards to determine the taxpayer's identity and tax obligations, this involves the identity of a taxpayer, especially how to determine the identity of a resident taxpayer. In this respect, different countries have different tax legislation and policies.
In order to effectively exercise tax jurisdiction, according to international practice, China has adopted internationally accepted residence standards and residence time standards for the division of resident taxpayers and non-resident taxpayer.
Living standard
Residence usually refers to the main place where citizens live and move for a long time. Because there are many places where citizens actually live and move. Therefore, China's General Principles of Civil Law clearly stipulates: "A citizen takes his domicile as his residence.
"That is to say, the address registered in the citizen's household registration book is the residence, and there is only one residence for a citizen in our country. In general, a citizen's domicile is his domicile. However, due to various reasons, citizens' habitual residence may be inconsistent with their household registration.
The place of residence is divided into permanent residence and habitual residence. The domicile stipulated in the general principles of civil law usually refers to permanent domicile, which has legal significance.
The habitual residence belongs to the habitual residence, which is sometimes consistent with the habitual residence and sometimes inconsistent. According to this situation, China's tax law defines an individual who has a domicile in China as "an individual who habitually lives in China for reasons such as household registration, family and economic interests." It can be seen that the residence standard currently adopted in China is actually a usual residence standard. By adopting this standard, China people and foreigners as well as compatriots from Hongkong, Macau and Taiwan Province will be distinguished from China citizens living in China.
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The so-called habitual residence or residence is a legal standard for judging residents and non-residents in taxation, not the actual residence or residence in a certain period of time. For example, if an individual is studying, working, visiting relatives or traveling outside China. He must return to China to live after the reasons for living abroad are eliminated.
Then, even if this person does not live in China, he should still be judged as habitually living in China. Therefore, the concept of "domicile" mentioned in China's individual income tax law is different from what is usually said.
(2) the standard of residence time
Residence time refers to the number of days a person actually lives in a country. In real life, sometimes an individual who has no domicile or habitual residence in a country, but lives in that country for a long time and earns income from it, should exercise tax jurisdiction and even be regarded as a resident of that country.
In the practice of taxing personal income in various countries, the length of personal residence has gradually formed as the standard to measure the residence time of residents and non-residents. China's individual income tax law has also adopted this standard.
The length of residence to judge the identity of residents varies from country to country. The stipulated time for going abroad is to live in China for 365 days in a tax year, that is, residence 1 year is the time standard, and individuals who meet this standard are resident taxpayers.
If you leave the country temporarily during your stay, that is, if you leave the country for no more than 30 days at a time or no more than 90 days in a tax year, the number of days will not be deducted and will be counted continuously.
The residence standard and residence time standard stipulated in China's tax law are two parallel standards for judging residents' identity. As long as an individual meets or reaches any of these standards, he can be recognized as a resident taxpayer.
Second, the scope of tax obligations of resident taxpayers and non-resident taxpayer.
(A) the scope of tax obligations of resident taxpayers
Individuals who are identified as China residents according to the two criteria refer to individuals who have domicile or no domicile in China and have lived in China for 1 year. They are resident taxpayers in China, and they should fulfill all their tax obligations to the China government, and pay personal income tax for their income from China and abroad according to law.
In order to facilitate the exchange of international personnel, in line with the principle of leniency and simplicity, individuals who have no domicile in China but have lived for more than 1 year but not more than 5 years should pay personal income tax on all their income obtained from China. With the approval of the competent tax authorities, individual income tax may be paid only on the part paid by companies, enterprises and other economic organizations or individuals within China.
If the above-mentioned individuals leave the country temporarily during their residence, the income from wages and salaries during their temporary work abroad will only be taxed on the part paid by their domestic enterprises or individual employers.
Individuals who have lived for more than five years shall pay individual income tax on all their income obtained from inside and outside China from the sixth year.
Individuals who have lived in China for five years mean that they have lived in China for five consecutive years, that is, they have lived in each tax year for five consecutive years 1 year.
Individuals who have lived in China for 1 year since the sixth year shall declare and pay taxes on their domestic and overseas income; Anyone who has lived in China for less than 1 year will only declare and pay taxes on the income derived from China in that year. Those who have lived in China for less than 90 days in a certain tax year, whose income comes from China and is not borne by the employer's institutions or places in China, shall be exempted from personal income tax, and the five-year period shall be counted from the year when they have lived again 1 year.
The above provisions do not apply to resident taxpayers with domicile in China.
(B) the scope of non-resident taxpayer's tax obligations.
Individuals who are determined to be non-China residents according to the two standards, that is, individuals who have no domicile and do not live in China, or individuals who have lived in China for less than 1 year, belong to non-resident taxpayer in China's tax law, and only pay limited tax obligations to the China government for their income originating in China, and pay personal income tax according to law.
The situation in non-resident taxpayer is very complicated, involving many sources of income and forms of payment. In order to give consideration to the financial interests of the countries concerned, China's tax law stipulates the scope of non-resident taxpayer's tax obligation in accordance with international practice.
1. Individuals who have no domicile in China and have worked continuously or cumulatively in China for no more than 90 days in a tax year, or have lived continuously or cumulatively in China for no more than 183El during the period stipulated in the tax treaty, are exempted from personal income tax only during their actual work in China.
However, if enterprises and institutions in China adopt the approved profit method to collect enterprise income tax, the wages and salaries earned by individuals who actually work in China, regardless of whether they are recorded in the accounting books of enterprises and institutions, shall be regarded as the wages and salaries paid or borne by the enterprises and institutions in China.
2. Individuals who have no domicile in China but have worked continuously or cumulatively in China for more than 90 days in a tax year, or have lived continuously or cumulatively in China for less than 183 days and less than 1 year, shall pay individual income tax for their income originating in China, whether paid by enterprises or individual employers in China or by enterprises or individual employers abroad.
Income from wages and salaries earned by individuals outside China is not subject to individual income tax, except for directors' fees or income from wages and salaries earned by domestic enterprises as directors or senior managers in China and performing their duties abroad. Directors' fees or salaries paid by directors or senior managers of enterprises in China, regardless of whether individuals perform their duties outside China, shall be declared and paid personal income tax.
For the above-mentioned individuals who are paid by overseas employers rather than domestic institutions. If you can book in advance to live continuously or cumulatively for more than 90 days or 183 days in a tax year, your monthly tax payable will be declared and paid on schedule. If you can't make an appointment in advance, you can declare and pay the tax payable of last month within 7 days of the following month after reaching 90 13 or 183.
(three) the implementation of part of the tax policy for individuals who have no domicile in China.
Since July 1 2004, if the previous provisions are inconsistent with the following provisions, the following provisions shall prevail:
1. Determination of tax liability and calculation of days of residence in China
When an individual who has no domicile in China needs to calculate and determine the number of days he has lived in China to determine what tax obligations he has in China according to the provisions of the tax law and agreements or arrangements, it shall be calculated on the basis of the number of days he has actually lived in China.
On the day of entry and exit, the actual number of days of stay in China will be calculated as 1 day.
2. For individuals, the date of departure and the actual working years in China.
For domestic non-domiciled individuals who work in both domestic and overseas institutions, or domestic non-domiciled individuals who only work in overseas institutions, when calculating their working years in China according to Article 1 of the Notice of State Taxation Administration of The People's Republic of China, People's Republic of China (PRC) on Several Specific Issues Concerning the Calculation and Payment of Individual Income Tax for Domestic Non-domiciled Individuals (Guo Fa [1995] 125), it shall be the day of their entry, exit, round-trip or multiple trips to and from home and abroad.
Third, determine the source of income.
As mentioned earlier, resident taxpayers and non-resident taxpayer have different tax obligations to our government. Generally speaking, resident taxpayers should pay personal income tax on their income from inside and outside China; Non-residents only pay personal income tax on income derived from China. For the income from China, the individual income tax law and its implementing regulations have made provisions on this.
The following income, regardless of whether the place of payment is within the territory of China, comes from the territory of China:
1. Wages and salary income from employment in China.
Generally speaking, there are two principles for taxing the income of dependent individuals such as wages and salaries: one is the principle of labor activities; One is the income payment principle.
The former takes the place where labor activities take place as the place where wage and salary income takes place, and the government of the place where labor activities take place exercises the right to tax income. The latter takes the place where the income is actually paid as the place where the income from wages and salaries occurs, and the government of the place where the income is actually paid exercises the right to tax the income.
Of course, the principle of labor activities and the principle of income payment are contradictory. When there is transnational dependent personal labor service behavior, it will happen that labor service activities take place in one country and wages and salaries are paid in another country, which will lead to double taxation of the same transnational wage income in both countries.
To solve this problem. The international community has gradually formed a time standard, that is, residents of one country go to another country to engage in dependent individual labor, and their income is paid by the employer in the country of residence, and the government of the country of residence can only tax their income if they stay in the country of non-residence for more than a certain period of time. The time standard determined by China's tax law is 90 days, while the time standard determined by the international tax treaty model is 183 days.
2. Income from production and operation obtained from production and operation in China.
3. Income from remuneration for services provided in China due to employment, performance, etc.
According to international practice. Generally speaking, there are restrictive standards for the taxation of income from transnational independent personal services, that is, residents of one country who go to another country to engage in independent personal services can be taxed by another country if they have a fixed base that they often use, or if they have no fixed base but stay continuously or cumulatively for more than a certain period of time, or if they have not exceeded the time, but have obtained a large amount of labor services.
Otherwise, another country has no right to tax its income. Therefore, for the income from transnational labor remuneration. There is also the issue of delineating the scope of taxation.
4. The income from leasing the property to the lessee for use in China.
5. Income from the transfer of buildings, land use rights and other property in China.
6. Income from providing patents, non-patented technologies, trademarks, copyrights and other franchises for use in China.
7. Income from interest, dividends and bonuses obtained from domestic companies, enterprises or other economic organizations and individuals due to holding various domestic bonds, stocks and shares.
4. Withholding tax agent
China's individual income tax is subject to the collection and management system of individual withholding and remitting.
Withholding and paying personal income tax is conducive to controlling tax sources from the source, ensuring tax revenue, simplifying collection and management procedures and strengthening personal income tax management. According to the tax law, all units or individuals that pay taxable income are withholding agents for personal income tax. When withholding agents pay taxpayers all taxable income (except the income from production and operation of individual industrial and commercial households), they must fulfill the obligation of withholding and paying taxes.